Experts Share How Much Savings You Really Need To Retire in Florida
Written by
Josephine Nesbit
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Jenna Klaverweiden
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Florida is one of the most popular retirement destinations in the U.S., and for good reason. But how much do you actually need to retire comfortably in the Sunshine State?
According to experts, how much you need depends on your lifestyle, location, longevity and other factors. Here’s what they had to say.
Also see a big money-saving opportunity that Florida retirees could be missing.
How Much You Need To Retire in Florida
“We instruct our students and clients when planning for a successful retirement to focus on four L’s: liquidity, lifestyle, longevity and legacy,” Myles McHale, accredited investment fiduciary and instructor at Cannon Financial, wrote in an email. “Retiring in Florida can be possible and a dream come true — but how much you’ll need depends on all of these factors. In addition, we can add one more L factor into the mix: Location.”
“The cost of living in Florida is more expensive than in other states when you factor in property taxes, insurance costs and the risk of hurricanes and flooding. All of these impact your needs in retirement,” said Alex Astin, a financial advisor with Burns Estate Planning in Florida.
How much you spend can greatly impact your retirement too. “How much you spend matters significantly more than how much money you have saved for retirement,” Astin said.
It also depends on whether you have any existing debt and how much. “If there is no debt on the books the true cost of retiring comfortably may not be as much as one would imagine,” Kevin Chancellor, a financial advisor and certified Social Security claiming strategist at Black Lab Financial Services, located in Florida, wrote in an email.
According to McHale, the estimated annual retirement cost in Florida can run from a modest $5,000 to $6,500 per month to well over $25,000 in monthly spending. He recommended saving enough to replace 70% to 80% of pre-retirement income for a comfortable retirement.
For someone targeting $75,000 to $80,000 in annual expenses over a 20-year retirement, McHale noted that a savings goal of around $1.6 million could be a reasonable benchmark, particularly in areas like Orlando.
“Should you aim for a modest retirement, areas like Ocala, Lakeland or The Villages, these areas offer lower costs yet great amenities,” he added.
How To Financially Prepare for Retirement in Florida
A successful retirement starts with a plan and realistic expectations.
To make sense of how much you’ll need, it’s helpful to break retirement into three lifestyle tiers: modest, average and upscale. “Each has a different cost, and each requires a different mix of income from Social Security, pensions, IRAs, 401(k)s or other assets,” Chancellor explained.
When talking to clients about expenses, Astin asks his clients how much they’re spending entering retirement on things like groceries, insurance, gas and electric bills, and travel.
“You don’t want to have to reduce your expenses in your golden years, which is another factor in determining how much money each individual needs to retire comfortably,” Astin explained. According to Astin, it’s better to plan for higher costs than expected. “This gives retirees breathing room if things end up being more expensive,” he added.
McHale also recommended renting before buying.
“We recommend to ‘try before you buy.’ You have the opportunity to rent in several locations to make sure both the feel as well as the expense are the right fit for you and your family before purchasing a home,” McHale explained. “Look for a community with good healthcare, social activities and a cost of living that fits your budget.”
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